NJ Faces Hefty Pricetag for Rail Tunnel, Transportation Projects

This is the first in a series of articles laying out the critical policy challenges that the next governor and Legislature will face, as well as their positions on these issues.

Two years from now, New Jersey’s governor and Legislature will not only have to come up with an $8 billion plan to fund the Transportation Trust Fund for another five years, but also $3 billion or more if they want New Jersey Transit trains to be able to use Amtrak’s Gateway Tunnel into New York’s Penn Station.

These are two of the most difficult fiscal challenges that the winner of the November 5 gubernatorial election will face, and Republican Gov. Chris Christie and his challenger, Sen. Barbara Buono (D-Middlesex), staked out opposing positions on the importance of a new rail tunnel long before the campaign began.

The Obama administration demonstrated its commitment to the $13.5 billion Gateway Tunnel project when it started construction 17 days ago on a $185 million concrete casement under the Hudson Yards in Manhattan for the rail tunnel to run through. The 800-foot-long “tunnel box” is scheduled for completion in October 2015 -- about the same time Northeast Corridor environmental impact studies are scheduled to be completed – and that’s when financing plans have to be put into place.

“There will be pressure on the governor to put New Jersey’s cash on the barrelhead, or the project will stop,” Robins said. “New Jersey’s share will undoubtedly be $3 billion to $5 billion because we will be one of the major beneficiaries. Where does that money come from?”

Funding a new rail tunnel into New York and renewing the Transportation Trust Fund without relying entirely on debt are impending fiscal challenges as daunting as the annual increase in pension payments that has been eating up the state budget. But neither Gov. Chris Christie nor his Democratic challenger, Sen. Barbara Buono (D-Middlesex) nor legislative candidates from either party have spent much time talking about these issues.

Christie defended his decision to kill the $8.7 billion Access to the Region’s Core (ARC) rail tunnel early in his tenure, which was already under construction in October 2010, by arguing that New Jersey taxpayers would have been on the hook for potentially billions of dollars in cost overruns. He also said the “tunnel to Macy’s basement,” as the new 7th Avenue station was dubbed, did not provide the direct service to Penn Station that New Jersey commuters needed.

Since then, the governor has not talked about the massive funding needed for a new rail tunnel project or about how he would renew the Transportation Trust Fund without spiking state debt. Christie financed his first TTF renewal in December 2010 partly by diverting $1.3 billion in New Jersey Turnpike Authority toll revenue and $1.8 billion from the Port Authority that was supposed to go to the ARC Tunnel.